guideLegal & Formation
IP Assignment Basics
Intellectual property is one of the first things investors check in due diligence. Learn what IP assignment agreements are, why they matter, and how to make sure your company owns what you've built.
Why IP Assignment Is Critical
Before investing, VCs will confirm that your company — not you personally — owns all the intellectual property you've built. If IP ownership is unclear or belongs to an individual, it's a deal-killer in diligence.
What Needs to Be Assigned
All IP created by founders, employees, and contractors in connection with the company must be assigned to the company. This includes: code, designs, trademarks, patents, trade secrets, content, and any inventions related to the business.
Founder IP Assignment
At incorporation, all founders should sign a Proprietary Information and Invention Assignment Agreement (PIIA). This transfers any IP created before or during the company's existence — especially important for technical founders who may have built code before formally incorporating.
Employee & Contractor Agreements
Every full-time employee should sign a PIIA as part of their offer letter. Every contractor/freelancer should sign an IP assignment clause in their services agreement. Without these, work created for hire may legally belong to the contractor.
Prior Employer IP Risk
If a founder or key employee previously worked at a company in the same space, there may be risk that their prior employer claims ownership of related IP. Have a startup lawyer review any prior employment agreements before raising. Investors will ask.